Second to none or second to last? … George Saunders won the 2014 Folio Prize for his book Tenth Of December. Photograph: Ian West/PA

A statement on the prize website said: “As we continue our work to secure a new sponsor for the Folio Prize, we have decided not to run a prize in March 2016. Instead, we are concentrating our resources on another promising development for the spring, while at the same time exploring how the prize might best fulfil its aim of bringing great books to readers in the future.”

The award was announced as the Literature prize in 2011, at a time when the Man Booker prize jury had been accused of “dumbing down”. Part of its USP was to admit American writers at a a time when the Booker was only open to writers from the Commonwealth.

Co-founder Andrew Kidd wrote at the time that “a space has opened up for a new prize in the UK that celebrates excellence and is judged by experts in the field of literature”.

The Folio is the youngest of several prizes currently in sponsorship limbo. The Samuel Johnson prize for non-fiction said in May that it was looking for a new backer after its anonymous sponsor had pulled out. In the same month, the Dublin-based Impac prize – which, with a purse of €100,000, is one of the world’s richest literary awards – announced that it too was seeking a new sponsor.